11.13.05
Posted in politics, culture at 12:48 pm by
I got to thinking this morning about the tenets of capitalism. I’ve been inspired by a great conversation Zalm has going on over at his blog about the free market and Christianity. Further, my thinking was drawn along by a little junket Jen and I made last night to a local (in the sense that it is near our house) eating establishment. In the sense that the buisness is owned by someone in the community, our trip to Friday’s was in no way a trip to a local establishment. However, it is our friends (who were our dinner companions last evening) favorite place to eat, so we went there.
Some of you will remember a post that I wrote a while ago about spending our money at places that are worth patronising, adding value to your local community, etc. Really, that post is a modest defense of capitalism. That is, it defended the idea that casting our votes (spending our money) at places that are a benefit to their surrounding community is a good thing to do.
In theory, such a thoughtful capitalism sounds like a good idea.
Let me tell you the story of two restaurants. One is named Caramba’s. It is the little mexican restaurant that I told you about about a year ago. The food was great, the service was fantastic, and it was an investment into our local community to purchase food there. 100 percent of the proceeds that this restaurant gained would eventually be invested back into the community of Grand Rapids. A great place to spend money, both for quality of food and for the community.
Last night, we ate at Fridays. The food wasn’t that good, the service was probably a shade worse than the food, and while some of the proceeds, I’m sure, were invested back into the community, much of the money the restaurant makes is also given back to a corporate entity. Realistically, buying food at TGI Fridays isn’t doing much for your community. You certainly aren’t getting much bang for your buck.
Theoretically, capitalism says that the market shops where they choose. Thus, it would make sense that places that benefit the community should do well. Thus, all is right with the world.
Unfortunately, Caramba’s went out of business at the end of this summer. It turns out they just couldn’t compete with the TGI Fridays, Logan’s Roadhouses, Famous Dave’s, Taco Bells, and Chilis of the world. Capitalism works in theory, but not in practice.
In practice, we Americans are shaped by the media, by our culture, and by the ads we see almost every minute. TGI Fridays has the money to pour into national and international advertising campaigns. TGI Fridays has the power to ‘win’ the battle over competitors not because of some altruistic motives that the buisness provides, but because it’s popular. I’m telling you, they’re not popular because people like going to Fridays (though I’m sure people do), but they’re popular because they’ve got the money to tell us that they are popular.
Capitalism is broke. It doesn’t work. It used to work. Before the days of the multinational corporation, when the small business was the primary foot soldier of the free market, capitalism probably really did reward hard work–to some degree. Those days, however, are gone. Capitalism will on rare occurances reward hard work, but with increasing regularity, capitalism now rewards privilege and old money.
The downfall of capitalism was individualism. In a society where we think of others more than we try to think of “me” capitalism could thrive. Unfortunately, we don’t have a culture that thinks of others. We’ve got a culture that rewards selfish action. Self-gratification is the purpose of money, not contributing wealth to the community.
Now, it’s true that free market Christianity supporters like Ted Haggard are crowing about how the free market generates wealth for the community. I would respond that wealth for individuals in a community does not make for a wealthy community. Especially not when the individuals gaining the lion share of the wealth were wealthy to begin with. That smacks frustratingly of a theology that says it’s okay to pave the streets with the poor as long as the rich have it well off.
This fairy tale that the free market generates wealth for a community is certainly an appealing one for the rich. I mean, wouldn’t it be great to know that you really didn’t have to change your lifestyle and could still be contributing to the poor. That’s why such a groundswell of support is likely to follow a character like Haggard. Hell, I’d love to believe that by shopping at Wal-Mart and eating at the local Chain Restaurant ™ I was contributing to the well-being of the most disadvantaged. It’d be great, I wouldn’t have to change my lifestyle at all!
It seems to me that if such a free market system was so good for communities’ wealth, we should’ve seen some empirical evidence of this by now. We should see communities to whom we’ve offered free trade benefits gaining wealth. We should see companies to whom we outsource buisness offering their employees better benefits and improved working conditions, right? Am I the only one who’s missing these folks’ improved condition?
Now, I haven’t given up all hope on capitalism. I still support initiatives to buy from organizations that have real value for communities (both here and abroad). Fairly traded goods are a great example of some of the fruits that a thoughtful capitalism could possibly reap. And, I’m so diluted as to think that a national socialism is without all ills (though, I admit that the thought of all people being able to go to the doctor when they’re, you know, suffering from a potentially crippling disease sounds appealing.) But, in the end, I just can’t believe that the free market would’ve been how Jesus would’ve handled society. I can’t imagine that Jesus would’ve left the well-being of the poor to the whims of a trickle-down system where the rich were given the luxury of continuing their lives in comfort.
Jesus was just way too hands on for that.
This all brings me back to Caramba’s and TGI Fridays. If capitalism was really contributing wealth to the right places, it wouldn’t be so hard for a buisness like Caramba’s to stay in business. BUT, it’s not. I’ve just got to pray that we don’t lose too many more places like Caramba’s to realize that capitalism isn’t a Savior–and the minute we set it up as a God it becomes an idol like everything else that we falsely set up as a God.
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Posted in politics, culture at 12:48 pm by
I got to thinking this morning about the tenets of capitalism. I’ve been inspired by a great conversation Zalm has going on over at his blog about the free market and Christianity. Further, my thinking was drawn along by a little junket Jen and I made last night to a local (in the sense that it is near our house) eating establishment. In the sense that the buisness is owned by someone in the community, our trip to Friday’s was in no way a trip to a local establishment. However, it is our friends (who were our dinner companions last evening) favorite place to eat, so we went there.
Some of you will remember a post that I wrote a while ago about spending our money at places that are worth patronising, adding value to your local community, etc. Really, that post is a modest defense of capitalism. That is, it defended the idea that casting our votes (spending our money) at places that are a benefit to their surrounding community is a good thing to do.
In theory, such a thoughtful capitalism sounds like a good idea.
Let me tell you the story of two restaurants. One is named Caramba’s. It is the little mexican restaurant that I told you about about a year ago. The food was great, the service was fantastic, and it was an investment into our local community to purchase food there. 100 percent of the proceeds that this restaurant gained would eventually be invested back into the community of Grand Rapids. A great place to spend money, both for quality of food and for the community.
Last night, we ate at Fridays. The food wasn’t that good, the service was probably a shade worse than the food, and while some of the proceeds, I’m sure, were invested back into the community, much of the money the restaurant makes is also given back to a corporate entity. Realistically, buying food at TGI Fridays isn’t doing much for your community. You certainly aren’t getting much bang for your buck.
Theoretically, capitalism says that the market shops where they choose. Thus, it would make sense that places that benefit the community should do well. Thus, all is right with the world.
Unfortunately, Caramba’s went out of business at the end of this summer. It turns out they just couldn’t compete with the TGI Fridays, Logan’s Roadhouses, Famous Dave’s, Taco Bells, and Chilis of the world. Capitalism works in theory, but not in practice.
In practice, we Americans are shaped by the media, by our culture, and by the ads we see almost every minute. TGI Fridays has the money to pour into national and international advertising campaigns. TGI Fridays has the power to ‘win’ the battle over competitors not because of some altruistic motives that the buisness provides, but because it’s popular. I’m telling you, they’re not popular because people like going to Fridays (though I’m sure people do), but they’re popular because they’ve got the money to tell us that they are popular.
Capitalism is broke. It doesn’t work. It used to work. Before the days of the multinational corporation, when the small business was the primary foot soldier of the free market, capitalism probably really did reward hard work–to some degree. Those days, however, are gone. Capitalism will on rare occurances reward hard work, but with increasing regularity, capitalism now rewards privilege and old money.
The downfall of capitalism was individualism. In a society where we think of others more than we try to think of “me” capitalism could thrive. Unfortunately, we don’t have a culture that thinks of others. We’ve got a culture that rewards selfish action. Self-gratification is the purpose of money, not contributing wealth to the community.
Now, it’s true that free market Christianity supporters like Ted Haggard are crowing about how the free market generates wealth for the community. I would respond that wealth for individuals in a community does not make for a wealthy community. Especially not when the individuals gaining the lion share of the wealth were wealthy to begin with. That smacks frustratingly of a theology that says it’s okay to pave the streets with the poor as long as the rich have it well off.
This fairy tale that the free market generates wealth for a community is certainly an appealing one for the rich. I mean, wouldn’t it be great to know that you really didn’t have to change your lifestyle and could still be contributing to the poor. That’s why such a groundswell of support is likely to follow a character like Haggard. Hell, I’d love to believe that by shopping at Wal-Mart and eating at the local Chain Restaurant ™ I was contributing to the well-being of the most disadvantaged. It’d be great, I wouldn’t have to change my lifestyle at all!
It seems to me that if such a free market system was so good for communities’ wealth, we should’ve seen some empirical evidence of this by now. We should see communities to whom we’ve offered free trade benefits gaining wealth. We should see companies to whom we outsource buisness offering their employees better benefits and improved working conditions, right? Am I the only one who’s missing these folks’ improved condition?
Now, I haven’t given up all hope on capitalism. I still support initiatives to buy from organizations that have real value for communities (both here and abroad). Fairly traded goods are a great example of some of the fruits that a thoughtful capitalism could possibly reap. And, I’m so diluted as to think that a national socialism is without all ills (though, I admit that the thought of all people being able to go to the doctor when they’re, you know, suffering from a potentially crippling disease sounds appealing.) But, in the end, I just can’t believe that the free market would’ve been how Jesus would’ve handled society. I can’t imagine that Jesus would’ve left the well-being of the poor to the whims of a trickle-down system where the rich were given the luxury of continuing their lives in comfort.
Jesus was just way too hands on for that.
This all brings me back to Caramba’s and TGI Fridays. If capitalism was really contributing wealth to the right places, it wouldn’t be so hard for a buisness like Caramba’s to stay in business. BUT, it’s not. I’ve just got to pray that we don’t lose too many more places like Caramba’s to realize that capitalism isn’t a Savior–and the minute we set it up as a God it becomes an idol like everything else that we falsely set up as a God.
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James said,
November 13, 2005 at 2:00 pm
Two things you might like to check out…
The first phase of Local First’s new website is now live. Hopefully (once the more dynamic sections go live) that will become a really useful resource for supporting local businesses.
Also, a guy called Michael Shuman spoke at Aquinas just over a week ago and presented a pretty compelling case not only for supporting local businesses but also for why we may see a significant shakeup in coming years that, if we take advantage of it, would make it easier for local businesses to compete. He has a new book coming out next year called “The Smallmart Revolution”.
(he was also very taken with Bistro Bella Vita, and said he’d come back any time so long as he could eat there)
Random Ravings said,
November 14, 2005 at 12:26 pm
Monday Morning Quick Links
There are always a lot of issues, articles, and stories that show up over the weekend that I often don’t get a chance to talk about. So I am going to try to start a new category called Monday Morning Quick Links - giving several quick mentions of valu…
Jacke said,
November 14, 2005 at 2:47 pm
Brandon, this is an excellent post and it goes into great detail about a lot of problems facing capitalism. To me, many of these problems must be faced individually by consumers. Businesses that grow are businesses that draw customers.
My questions are:
What system of government would you replace capitalism with and why?
Are you aware that socialized health programs in other countries are not faring well? That people do not get the quality and expedient care that they receive in the states?
Are you considering that the poorest among us who need it and are eligible for it can get health coverage through medicare?
I think our government does better than most, personally. I think we live in the best country in the world and I think that is evident to the entire world. Instead of telling us why capitalism is failing why don’t you give us an alternative?
I’m listening….
ninjanun said,
November 14, 2005 at 3:45 pm
Hey Brandon, great post!
I had a similar experience with a local Italian restaurant called Oregano’s. It was a little mom-and-pop place run by a Christian couple. The husband had travelled to Italy to learn how to really cook in the Italian style. It was a dream of his to open this restaurant. They had homemade fresh pasta, real Italian sodas, excellent service, and live entertainment (of which I was a part of). The atmosphere was cozy and romantic. I don’t think I’ve ever eaten better Italian food anywhere.
But then, an Olive Garden opened down the road. And of course people started going there because, well, it was Olive Garden. It didn’t matter that the atmosphere was predictable, the music canned, the service was mediocre, and the pasta wasn’t fresh. All that mattered was it was a recognizable name, the food was faster, and maybe slightly cheaper. And of course the food may have been cheaper and faster, but that’s because Olive Garden doesn’t make their pasta fresh and can outsource a lot of its product and buy in bulk since they’re a national chain–things Oregano’s couldn’t (buy in massive quanitities) and wouldn’t (use frozen pasta) do. So Oregano’s went out of business in less than two years, even though it had been a thriving business before.
I think capitalism can work, but only if there are laws in place that help protect the “little guy” and really level the playing field. I don’t know how that would be accomplished, but I’m open to hearing your suggestions and further thoughts on this, Brandon.
Brandon said,
November 14, 2005 at 4:43 pm
I do have lots of thoughts…but I just don’t have the time in the right now to write more on this. Hopefully soon. As for now, would anyone like to address Jacke’s concern about health care nationalization?
Zeke said,
November 14, 2005 at 8:18 pm
Well, I’m with Jacke… and the rest of you. Capitalism delivers the best overall outcome, but it is definitely not optimal. However, it can get a lot worse when you try to monkey with incentives so that people make the kind of decisions you want them to make (such as, to patronize the kinds of places you’d like to see in business versus the kinds of places you would rather not see in business).
I despise Wal-Mart and mourn the passing of mom & pops. But I’m not clear what cure would be better than the disease, other than education. But I’m listening too, Brandon.
And Jacke, there are holes that a lot of people can fall through with our healthcare system. My mom is right on the precipice. 62, too young for medicare… can’t get private insurance… makes too much for public assistance unless she gets hospitalized… pardon my French, but it’s been a nucking fightmare. A serious nucking fightmare. I just have to appeal a denial again today, and I have to fight to recover about $5,000 of expenses my mom incurred, and she’s in collections from an ambulance provider on top of it all because they won’t bill a state agency. It’s almost made a raging liberal out of me.
Jacke said,
November 14, 2005 at 10:14 pm
Zeke, I’m really sorry to hear about all the problems you are having with your Mom. I’m going through a really bad time with my Mom right now too. Geesh, it hurts when someone you love is in pain and there isn’t anything you can do.
BUT, the next time you are considering becoming a liberal remember: Liberals are NOT allowed in the jell-o pool!!! ::winkers::
Tim Sean said,
November 14, 2005 at 10:40 pm
It is frustrating that people seem to swallow (pun intended) whatever the market is telling them is the hip place to eat. In my small town of 30,000 we have mostly local restaurants because we are not big enough to attract chains. But they eventually began to move in as the town had a spurt of growth along our interstate entrance—Wal Mart, Chilis, Garfields. You should see how people went gaga over these places when they came in. I just don’t eat there. I prefer our towns little quirky restaurants.
They are now building a Wendy’s next to the Super Walmart. You would have thought Jesus had announced his return at the opening of Wendy’s in Shawnee, OK. People! Please get a life!
Zeke said,
November 14, 2005 at 11:01 pm
BUT, the next time you are considering becoming a liberal remember: Liberals are NOT allowed in the jell-o pool!!! ::winkers::
Yeah, well I remember from college that all the hot chicks were commie libs.
For the record though, Mrs. Zeke is a hot chick and she’s just this side of Ann Coulter.
Jacke said,
November 14, 2005 at 11:24 pm
Zeke, I just listened to your latest pod-cast. Very interesting. You gave me some things to think about, you are right that you leave no room for argument on your main point.
Mrs. Zeke sounds like my kinda girl! She’s welcome in the pool, eny ole tyme!
Sorry I commented about this here rather than on your blog, I’m tired and I’ve gotta get off this computer.
Bless you all!
Audrey said,
November 18, 2005 at 2:22 am
Jacke said:
Capitalism is an economic system, not a governmental system. Personally, I think that regulated capitalism has a lot to recommend it.
Asymmetric information is a serious problem for investors. Boards of Directors will know a company is heading for a stock fall long before the run-of-the-mill investor does. That’s why we (theoretically) prohibit insider trading. Companies (like WallyWorld) that create a monopoly can abuse their monopoly power (and WallyWorld does — their low, low prices go up after they’ve eliminated their local competition. Laissez faire capitalism sucks as an economic system unless you happen to be one of the robber barons. But that’s what Reagan/Freedman/Bush II want to take us back to.
Communism is a wonderful idea for social insects. It sucks for primates. Regulated capitalism with a social safety net seems to be the idea we’ve come up with yet.
Whether the national health systems in other industrialized countries are working well or not depend on who you talk to. The reason you can get ‘expedient care’ in the US is because we have a serious overcapacity in our hospitals and surgical centers. The quality of that care is open to question. We spend nearly twice as much on health care per capita as any other industrialized country. If we’re spending that much, you’d think that we’d have great health outcomes, right? You’d be wrong. Our neonatal mortality rate sucks, our cancer rate is awful, our preventable childhood disease rate (mostly a function of vaccination rates) stinks too.
Nations with national health systems put their money where it makes the most difference. They see to it that their children are vaccinated, that pregnant women get good prenatal care and nutrition, and that children get well-child care.
We put money in MRI and CT machines in every hospital, and all the latest surgical toys. We put our money in ICUs and CCUs. Instead of keeping kids from getting hooked on nicotine, we try to treat lung cancer. The tale goes on and on.
As an explanation of our health care system, that makes as much sense as the so-called pharmaceutical addition to Medicare. Both of them have big doughnut holes.
Medicaid (not Medicare, that’s pretty much seniors only) is a means-tested program. What that means is that it’s limited to children in poor families, and the very poorest adults. The limits vary from state to state, so you can’t make a meaningful general statement.
What you can say for sure is that adults living in households with incomes just over the Federal Poverty Level are Shit Outta Luck (SOL). They don’t get Medicaid, and they almost surely don’t get insurance through their employer, either. Or perhaps their employer offers it, but they can’t afford to put a fourth of their income to medical insurance. There are all those annoyances they need to get, like food, rent, and fuel for the furnace.
After Medicare and Medicaid were enacted in the mid 1960s, their advocates really thought they would develop into a national health system. Medicare would expand down in age, while Medicaid would have increasingly less restrictive means tests. Somewhere in the middle, they would meet up. If you want proof that that was what was expected, look at the US-HHS: their medical financing arm is the Center for Medicare and Medicaid Services, CMS for short.
Well, it didn’t happen that way. The system we have is unsustainable. Medical care is already rationed. The decision we have to make now is this. Is the current practice of dollar rationing fair? Or, should we consider replacing it with something that is more equitable?
Don’t misunderstand what I’m going to say next. I dearly love the United States of America, the nation of my birth. I think that there are many admirable things about my nation, and I’ll even agree that it’s one of the best countries in the world to live in. On the other hand, I’m sure that I feel that way at least in part because I’m an upper-middle class member of this society. I don’t know how I’d feel if I were a member of the underclass. I’m also quite sure that the members of the Soviet Nomenklatura thought that the USSR was a perfectly lovely place in which to live, too.
Audrey
Jacke said,
November 20, 2005 at 8:02 pm
Geesh, I’ll bet I spent a half hour looking for this comment on zalm’s blog, Audrey. I have been waiting to get the time to reply to you!
I realize that capitalism is not a government system but rather an economic system, forgive me for stating that incorrectly.
I agree with you that regulated capitalism is the best solution, what I would point out is that that solution is already being attempted. As with anything that is always changing and fluxuating it is an ongoing process, right? So would you disagree that that ongoing process has already been in place for some time? Perhaps it is not as effective as we would like, at times, but certainly it is in place.
Audrey writes:
“Whether the national health systems in other industrialized countries are working well or not depend on who you talk to.”
I’m not talking about people’s opinions, I am talking about socialized health care in practice. Sure the one’s who oppose it have opinions and the ones who support it have opinions but we can actually look into whether it works in practice or not and it doesn’t appear to be working very well in those countries which have embraced it. That’s MY opinion, but it is based upon facts. Perhaps you could find facts to support the alternative position and I expect that is what you meant in your comment. I just like to differentiate between fact and opinion.
Certainly I would agree with you that preventive care in the U.S. is lacking, but who’s fault would that be? The people I know don’t generally visit the Doctor’s office when they are well to make sure they stay that way, they visit the Doctor’s office when they are sick, to get help. Changing our health care system to a socialized one will not change that, individuals, alone, have the responsibility to change that. Surely there are reports on the news, nearly daily, regarding what is healthy and unhealthy for citizens to eat or drink, Audrey. Surely there are health food stores all over the country who are happy to sell their products and explain the efficacy of those products. Surely there are diet centers all over the country for those who wish to avail themselves of them. Do you really think socialized health care would change the fact that Americans, at least the majority, pay little attention to their diet and health status until they become ill? If so, upon what do you base that opinion?
Since you seem to be more educated about Medicare and Medicaid, what is the window of income which is in that range wherein a person cannot afford health care and yet can get no government assistance?
No one, including me, is claiming that America is perfect, I just think our system of health care is better than socialized health care.
Concerning the equipment which must be paid for by patients in the form of the high cost of health care, without that equipment it would be much more difficult to diagnose illness than without it. Surely you aren’t suggesting that we not access the best technology and equipment because you don’t want the costs to be reflected in your bill? Would you turn down those tests which utilize that equipment if your life depended upon it? If your doctor could not diagnose you properly without it? Who do you think should be responsible for the costs of materials needed in order to provide you adequate health care?
Brandon said,
November 20, 2005 at 8:04 pm
…was that the sound of a giant can of worms being opened, Audrey?
This one’s all yours.
Jacke said,
November 20, 2005 at 8:07 pm
This sentence:
Concerning the equipment which must be paid for by patients in the form of the high cost of health care, without that equipment it would be much more difficult to diagnose illness than without it.
Should have read:
Concerning the equipment which must be paid for by patients in the form of the high cost of health care, without that equipment it would be much more difficult to diagnose illness than with it.
Ooops.
Audrey said,
November 22, 2005 at 2:50 am
Actually, the general trend since the election of Ronald Reagan has been to decrease the amount of regulation and the effectiveness of that regulation. The only real exception to that trend has been Sarbanes-Oxley, which (so far) is of questionable merit.
Our Food and Drug Administration is now essentially a captive of Big Pharma. The Environmental Protection Agency has been gutted by both industry-friendly rules changes and by ending the excise tax on the chemical companies that paid for the Superfund. When was the last time you heard of a corporation being required to clean up its chemical waste mess? We’re heading right back into laissez faire capitalism. It didn’t work in the late 19th century, there’s no reason to believe it will work any better today.
Good. I like to differentiate between fact and opinion, too. The fact of the matter is that a fair amount of research shows that when it comes to measurable outcomes, the U.S. health care system doesn’t stack up well against other industrialized countries. I’m not at the office, so I don’t have my references handy, but I’d be happy to post a couple for you when I am there. When you measure against the easy stuff like neonatal mortality rates, infant mortality rates, low birthweight, etc. we come off at best in the middle of the pack (the WHO publishes this stuff annually). When you look at slightly tougher stuff, like estimated years of life lost due to treatable condition, we end up in the middle of the pack, again. I’ll get a reference on that tomorrow, if you’ll accept a UK study published in The Lancet as being authoritative.
In fact, about the only place we end up at the top of the list is per capita health expenditures. That would be an okay place to be if our measurable outcomes were at the top of the list, too. But they aren’t, and that is the essence of my complaint about our system. It’s grossly expensive, and it doesn’t work.
Just to toss some gasoline on the fire, satisfaction surveys show that the Americans happiest with their health care are the seniors covered under Medicare. That’s socialized medicine…
The cost of medical care depends on who you are and who you are insured by. If you don’t have health insurance, health care is extremely expensive. Hospitals and physicians (outside CHC clinics and other free clinics) will happily charge a walk-in five to ten times what an insurance company will pay the same provider for the same service. And the provider accepts that insurance payment as payment in full.
How do you expect the uninsured (and there are 44 million of them in this country — see the 2005 Census Bureau Report on Income Poverty and Health Insurance) to get preventive care? The clued-in will use CHC clinics, but there are a lot of areas unserved by CHC clinics.
What ends up happening is that things wait until they reach a medical crisis, and the patient goes to a hospital emergency room. Because of the Emergency Medical Treatment and Active Labor Act (EMTALA) they’ll receive treatment there. That’s the most expensive place to treat people, but ERs have people show up weekly, if not daily, in a diabetic coma or ketoacidosis, with acute asthma attacks, and so forth. We’ve constructed a system that treats acutely ill people in the most expensive possible setting. That’s just stupid, but it’s our competing social values at work. On the one hand, we don’t want to handle health care as a part of the social contract. At the same time, we think that people who need medical treatment ought to get it, regardless of their ability to pay. We need to wake up and understand that those goals are in direct competition. We can’t have them both.
That question doesn’t have a simple answer. Medicaid eligibility rules vary from state to state, and there are over 40 eligibility categories in some states.
Let’s take a friend of mine as an example. He’s a 62 year-old semi-retired male. He’s drawing $24,000/year from his 401K, which his financial advisors say is sustainable and should preserve the capital in his account. The only way he would be eligible for Medicaid is if he had a disability. He doesn’t, so he’s out-of-luck, until he’s 65 and eligible for Medicare. He will be eligible, because he’s worked more than enough quarters paying FICA taxes. Once he gets on Medicare, he’s got a list of things he needs to have done: a colonoscopy, a cataract removal and a couple of other things. The irony of ironies is that if had not had one cataract done before he was involuntarily retired, he’d be legally blind (and therefore eligible for Medicaid under disability). Does that make any sense at all?
Or, let’s take another example. Typically, Medicaid will pay for family planning services for women in households up to 185% of the Federal Poverty Level. That’s around $18,000 for a family of two. But it’s limited to prenatal care and pregnancy-related problems.
Now, a decent comprehensive health insurance policy runs $4,000 to $5,000 per year in most of the country. For my semi-retired friend, that would amount to 17% of his income. For a family of two getting family planning services through Medicaid, it’s more like 20% of their income. That’s pretty steep. By the time you get to 300% of FPL, most people are in a position to participate in their employer-sponsored health insurance.
Jacke, you are free to have your opinion about our health care system. Before you decide that it’s the best in the world, you ought to look carefully at costs and outcomes. You ought to consider that current estimates are that 30% of our health care expenditures are sucked up in administrative costs.
As far as capital-intensive equipment is concerned, the question is not should we have it. The question is how much of it we should have. Does every hospital need a Magnetic Resonance Imaging machine? Does every hospital need a CT scanner? We have such a glut of CT scanners now that some groups are selling whole body CT scans to the wealthy worried-well. Hospitals are dumping perfectly good old-style MRI machines for the new open MRI machines. Is that cost-effective?
Anecdotes aren’t statistical evidence, but let me tell the anecdote of my $40,000 appendectomy. In trying to diagnose my problem, I got three abdominal ultrasounds, a lower GI X-ray series, an abdominal CT and an abdominal MRI. The insurance company wouldn’t authorize surgery until the radiologists confirmed appendicitis. My doctor was at her wit’s end, and sent another appeal to the radiologists with the history. They allowed that perhaps they might just see some swelling at the distal end of the appendix, maybe. The surgeon they sent in said that he was quite sure I had chronic appendicitis, but that because he wasn’t absolutely certain and because the radiologists were ‘fucking clueless’ (his term) he wanted to do an exploratory laparoscopy. He’d look all through my belly, and snag the appendix while he was at it. Of course, there was also the possibility that he’d have to do conventional surgery if the appendix was too hot to remove safely with the scope. He got it out with the scope, and the pathological diagnosis was chronic appendicitis.
End of the tale: after this was all over, my internist told me that in the end I got the care that everyone should get. Appendicitis can present as all sorts of things, and in oddball cases it’s cheaper to just send a surgeon in with a laparoscope to see what’s going on rather than mucking around with non-invasive imaging. More than half the cost of my appendicitis was run up with noninvasive diagnostics. Oh, and I was back at work in five days, instead the two or three weeks recovery conventional surgery would have required.
Audrey
Jacke said,
November 22, 2005 at 11:40 am
I have a response prepared for Audrey, however this is what I receive when I try to send it:
“Cannot post comment, please correct these errors:
Supplied comment is invalid”
Brandon said,
November 22, 2005 at 12:16 pm
Jacke,
I would try again. Otherwise, email me the comment and I will try to post it. I don’t know what’s going on with my blog software…sorry.
Jacke said,
November 22, 2005 at 8:52 pm
Audrey writes:
You mean including all of the eight year term of Bill Clinton!? :0
Audrey:
Well, I must admit that I don’t go searching for news stories on the topic,
on a daily basis. I certainly wouldn’t assume that because I haven’t personally heard of any cases in the last week or two that it means that no one is monitoring corporate chemical waste, though. Do you have time to do an in depth study on that, Audrey? I don’t and your question proves nothing.
Audrey:
From an article written by Dr. Sydney Smith a family physician who has been
in private practice since 1991. She is board certified by the American Board
of Family Practice, and is a Fellow of the American Academy of Family
Practice. She is the publisher of MedPundit. The article was posted at Tech Central Station:
Jacke said,
November 22, 2005 at 8:55 pm
Audrey:
No, Medicare does not change our health care system to socialized health
care, it pays the expenses of those seniors on a low fixed income who qualify for it. Of course seniors who are on Medicare are the happiest about their health care! They are getting the same health care that others, who are not on Medicare, are getting but they don’t have to PAY for it, ha, who wouldn’t be happy?
You claim our system is grossly expensive and DOESN’T WORK? Excuse me? Did you or did you not have surgery for appendicitis and are you or are you not
alive? It seems to have worked for you.
Audrey:
Audrey, for your information, I do not have health insurance, I feel that I
am responsible for my own health, I feel that each of us are. Our Constitution does not guarantee us the right to free health care. Health insurance is expensive, that is why I do not have it, I do not feel I can afford it but because I cannot afford it I do not feel that the government is responsible for me. I am unemployed, every time I start considering getting a job I am reminded, yet again, that my Mother’s needs of my time are too great for me to feasibly consider getting a job, so my husband is saddled with the
responsibility of bringing in enough money to support us. Now, I could get a job, Audrey, I could find a job with health benefits, I choose not to because my Mother needs me and I have made the choice to be available to her, at a sacrifice of financial gains and benefits but it was MY choice and does not and should not make the government responsible for my health care. There have been occasions where I or my husband have had to go to the Doctor. We have been in a position that we had to SAVE our money in order to afford the trip. Tough? Yeah, it’s tough but it IS a choice we made.
Surely you aren’t suggesting that we not access the best technology and
equipment because you don’t want the costs to be reflected in your bill? Would you turn down those tests which utilize that equipment if your life depended upon it? If your doctor could not diagnose you properly without it? Who do you think should be responsible for the costs of materials needed in order to provide you adequate health care?
You didn’t answer my questions, you avoided them.
Administrative costs are a necessary evil. When I go to the Doctor’s
office, or take my Mother to her Doctor’s office, I expect they will have a file on my past history, or her past history. She will receive a phone call to remind her of an appointment she has. She will receive mail from the Doctor’s
office at various times, giving her necessary information. There is a
receptionist who will schedule follow up appointments…etc., and so on. Those
things cost money…you begrudge the receptionist her pay? I suppose if the
government changes our system of health care to a socialized one they can find
volunteers to do the clerical and administrative work required in the medical field? We all know how brilliantly, financially responsible government is, don’t we?
Jacke said,
November 22, 2005 at 9:28 pm
Now, here is some information for you regarding socialized health care systems:
Excerpts from Walter Williams, the John M. Olin Distinguished Professor of Economics at George Mason University, he is an adjunct scholar at the Cato Institute.
Facts that are not frankly faced have a habit of stabbing us in the back.
—Sir Harold Bowden
Jacke said,
November 22, 2005 at 10:40 pm
Thank you, Brandon for taking the time to post my response to Audrey for me.
That was very kind and I know it took up your valuable time.
dufflehead said,
November 22, 2005 at 10:58 pm
www.2ontario.com/welcome/ooql_402.asp
http://matthewholt.typepad.com/the_health_care_blog/2004/10/international_u.html
http://www.cmwf.org/publications/publications_show.htm?doc_id=221519
our founding fathers did mention something about the right to life liberty and the pursuit of happiness . . . i’m guessing they weren’t thinking of a bedridden or terminally ill life.
Jacke said,
November 22, 2005 at 11:07 pm
Audrey wrote:
“We have such a glut of CT scanners now that some groups are selling whole body CT scans to the wealthy worried-well.”
Audrey, they do that to off-set the cost of the equipment. Earlier you were fussing about not enough resources being put into preventive care, this is a perfect example of preventive care, wouldn’t you say? So, what’s yer beef?
Jacke said,
November 22, 2005 at 11:10 pm
Dufflehead,
They were NOT talking about free health care when they said you have the right to life, liberty and the pursuit of happiness. You can’t be serious? :0
Rivikah said,
November 23, 2005 at 12:54 am
I heisitate to weigh in on this conversation but I do wonder…
How, if the United States has the best health care system in the world, is it that it can boast of only the 48th longest life expectancy.
With Canada in 12th position, Australia in 8th, Sweden in 7th all with largely government funded health care systems, my confusion is not alleviated.
A similar pattern can be seen in infant mortality rates.
(From here: http://www.cia.gov/cia/publications/factbook/rankorder/2102rank.html )
Jacke said,
November 23, 2005 at 7:47 am
That’s a good question, Rivikah, but who said the U.S. has the best health care system in the world?
Brandon said,
November 23, 2005 at 8:10 am
Essentially, Jacke, you did.
If you’re not saying that we’re the best here, you’ve got a funny way of not saying it.
Jacke said,
November 23, 2005 at 9:01 am
Brandon, you missed this one:
“No one, including me, is claiming that America is perfect, I just think our system of health care is better than socialized health care.”
I still believe our system of health care is better than socialized health care.
I also note that obesity in America is growing and think that those statistics cited by Rivikah reflect more what Audrey brought up earlier, preventive health care. So, who is responsible for preventive health care?
The government and the media make an effort to consistently educate our Nation about what is healthy and unhealthy to eat and drink but the American people continue to get fatter and fatter on McDonalds, Burger King, Wendys, Sonic, Pizza…the list goes on.
Do you remember the hype about the “Food Pyramid” a few months back? So, what do we do?
It has been proven that our diets have much to do with the overall state of health in America. I also remember a promotion in the media about the good health of Asian countries. They claimed it had to do with the “Mediteranian” diet.
In my humble opinion, the point Rivikah brought up has much more to do with diet and lifestyle than our health care system.
dufflehead said,
November 23, 2005 at 12:09 pm
what forest? all i see are trees.
Audrey said,
November 23, 2005 at 12:09 pm
Jacke,
You’ve missed the point, you’ve engaged in ad hominem arguments (The Lancet has confused itself with a political rag — I assume from that quote you aren’t interested in that citation). The Cato Institute is a right-wing freeper think tank, and their ideological arguments aren’t of much interest to me. The fact that the Canadians don’t spend enough on their health care system to get their citizens the treatment they want isn’t news. One of the reasons they are losing doctors (especially specialists) is that the opportunity cost associated with moving to the US to practice is extremely low. We have reciprocal licensing agreements with Canadian med schools and post-grad medical education programs. The existence of our money-bloated system just south of them distorts their system.
You cannot measure the effectiveness of a health care system by looking at individual outcomes. You can only measure the effectiveness by looking at population-wide measures. When you look at system-wide measures like life-expectancy at birth, infant mortality rates, childhood morbidity and mortality, our system doesn’t stack up well against other industrialized countries. Even the Cato Institute acknowledges that. Facts are facts, and the same facts for everyone. What they won’t do is acknowledge that the system itself is the problem.
You asked if whole-body CT scans for the wealthy worried-well isn’t good preventive care. The fact is that it isn’t: what you end up with are lots of false positives, because in the absence of other clinical indications apparent abnormalities in the scan don’t mean much. I can explain it more easily in terms of ELISA tests for HIV infection.
Suppose that just on a whim you decide to have an AIDS test. You don’t have any identified risks, but you test positive. Does that positive ELISA test mean you have AIDS? The answer, suprisingly is a resounding no. If you have no identifiable risks, the positive ELISA test means that the probability that you actually are infected goes from about 3% to about 1/3. In other words, the odds still favor it being a false positive. The same thing applies to most medical screening procedures. We don’t apply them to the general population because the false positives would swamp the real positives.
We don’t have men get mammograms. Does that mean that men don’t get breast cancer? Absolutely not! Men make up about 1% of the breast cancer cases in this country. But if we had men get mammograms, the false positives would fill our outpatient surg centers with biopsies that will almost invariably be negative.
One important point that we’re glossing in this discussion is that the point isn’t getting health insurance, it’s getting health care to people who need it. It morphs into a financial discussion because paying for our very expensive system makes the financing the meta-issue.
By the way, Medicare is most certainly a social insurance package, and therefore it is socialized medicine.
Here’s the bottom line, Jacke. When God went looking for Abel, he asked Cain where his brother was. Cain asked if he was his brother’s keeper. God in essence, said youbetcha!
You and your husband need access to health care. Just out of curiosity, how long a wait does our system impose on you or your husband when you need to see a doctor? You ought to compare that wait with the wait your mother has, and ask yourself whose got the shitty end of the stick.
Note that I’m not saying that your mother ought to have to wait as long as you do to see her doctor(s).
I believe that you ought to have access to health care, partly because I take God’s charge seriously. I don’t practice medicine, but I can (and do) work in real-life to understand the health care system and to help get a better system for everyone.
The existing system rations health care by wealth. I asked you before if you thought dollar rationing was a sensible way to ration health care.
The question before us is not whether to ration health care because it is and will be rationed somehow. The question is rather how do we ration health care in a way that does the most good for our population.
Audrey
dufflehead said,
November 23, 2005 at 4:41 pm
maybe someone can tell me (and i’ll look into this idea over the weekend) :
can congregations as a non-profit offer health insurance to the members?
would this be a viable alternative? would people be willing to pay some amount based on their income?
my guess is that this wouldn’t work simply because of how few truely tithe, or maybe it would work better if none of the money is used for overhead and goes straight to the “fund”, as it were.
Jacke said,
November 24, 2005 at 7:40 am
Audrey,
If you will refer to my first remarks on the topic I made my position clear
in that I, personally, in my opinion, believe our system of health care is
better than socialized health care. I admitted that it isn’t a perfect system.
It really doesn’t matter whether I believe that The Lancet is politically
biased or you believe that The Cato Institute is politically biased (and by the
way, the author is with the Cato Institute but she was citing “The Fraser
Institute, a Vancouver, B.C.-based think tank,” who “has done yeoman work
keeping track of Canada’s socialized health-care system. It” had “just come out
with its 13th annual waiting-list survey.”), the point is that I can complain
about socialized health care and you can complain about the free market and the
system of health care that we have here in the U.S. When I asked you what
solution you had, you said regulation. Well, we do have regulation, though
not perfect, we certainly do have it. Socialized health care is not perfect
either, so your point?
I felt I was perfectly reasonable in my remarks, I still feel I was
perfectly reasonable in my remarks. Why you chose to take issue with me, I really
don’t know. I answered you tit for tat for a time but it is clear that it is
getting neither of us anywhere. I never intended my comments to convince you
or anyone else of anything, I was merely giving my opinion. If you don’t like
my opinion, that’s fine, but please don’t pretend I have no basis for
having it.
Even if our system of health care is NOT better than socialized health care
it surely isn’t worse.
As far as my wait to get in to see a Doctor? I can usually get in within
the week. I go to a clinic affiliated with a local hospital, to a Doctor who I
kept from an HMO plan I previously had through an employer. I am still that
Doctor’s patient but I do not have a co-pay any longer and I have to pay for
the entire cost of the visit before I leave the clinic. I don’t have a
complaint with that at all. I don’t mind paying for a service I need. I pay for
a meal when I go to a restaurant and I tip the waitress for providing
his/her service, why shouldn’t a Doctor expect the same? Why would I expect the
government to pay my bill?
I like our free market, I like capitalism and I like Wal-mart. Our country was founded on the principles which make the American dream possible. I happen to like those principles and do not care to see them radically changed and I will fight in the arena of debate against those who would like to change
our system to a socialistic system.
Is my opinion clear enough for you now?
I originally thought we were having a discussion but this doesn’t seem like
a discussion at all, it is more of an argument than a discussion. I have
made my points in the discussion and you have made yours.
I do hope that you and all who write and read on this blog will have a
fabulous Thanksgiving.
Night.
Jesse M said,
November 28, 2005 at 8:33 pm
Fun! Quick weigh in on one item - current life expectancy and many of the other problems in American health are not caused by a lack of care. They are caused by poor health in Americans due to many other reasons.
We are the fattest major nation as well as the most out-of-shape major nation on earth. We eat WAY too much sugar which increases the likelihood of diabetes - a VERY nasty lifetime illness that cuts. We tend to smoke more, though that is changing, and that leads to higher cancer rates than other countries. Obesity and poor cardiovascular health give us more heart attacks than any other nation. Believe it or not, many Americans are also malnourished, not because they have too much to eat but because they don’t eat the right things. (a bag of chips and a beer don’t give much nutrition while they do fill you up)
In EVERY study, America’s “supply” of medical care is way above every other country in the world (more drugs and procedures are available here). We also are able to access it more univerally than most major countries (in actual percentage of people who use it). We have faster access to it than ANY other country.
Vaccines are not used by Americans because they aren’t available or are too costly, but because American society has much stronger reservations about using vaccines than the UK, France, or Germany. (I suspect we’re more reserved than Europe in general, but the UK, France and Germany are the only ones I know for sure.)
We spend way more per capita because we have a much higher percentage of people with chronic illnesses and defects like autism, Downs Syndrome, Chronic Fatigue Syndrome, Spinal Meningitis, Multiple Sclerosis, and others. All these things make our per capita costs run sky-high while simultaniously making our health measurements by the WHO dismal.
Healthcare policy is a balancing act between trying to allow hospitals to flourish (i.e. make money) and trying to make sure as many people as possible can access healthcare.
Audrey is completely right - American’s are in poor health. But it’s not from a lack of medical care or even grossly inefficient care. It’s from the general lifestyle of Americans. And it’s because American healthcare is taking care of a much higher percentage of serious and chronic illnesses than most other countries.
Trying to create a system where truly EVERYONE has access to EVERY drug and process is certainly laudable and good, but while trying to do that, there are hundred of nasty unintended problems that are created. A pure “free-market” approach to healthcare (which hasn’t ever existed, even before Medicare came about) will leave holes that should be patched up. But some holes can’t be patched without weighing down the rest of the system. Too many patches will eventually drag down the entire system so that no one will get decent care.
(This same problem is also fairly applicable to economic systems.)
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